Cheng v Lam

[2017] WASC 237

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   CHENG -v- LAM [2017] WASC 237

CORAM:   MARTINO J

HEARD:   8 AUGUST 2017

DELIVERED          :   8 AUGUST 2017

PUBLISHED           :  16 AUGUST 2017

FILE NO/S:   CIV 1706 of 2015

BETWEEN:   MARY YUEN SHAN CHENG

Plaintiff

AND

FRANCIS HUNG LAM
First Defendant

ANDREA MAN YEE CHENG
Second Defendant

(BY ORIGINAL ACTION)

FRANCIS HUNG LAM
First Plaintiff by Counterclaim

ANDREA MAN YEE CHENG
Second Plaintiff by Counterclaim

AND

MARY YUEN SHAN CHENG
First Defendant by Counterclaim

CHAN THANH LAM
Second Defendant by Counterclaim

DAVID CUONG CHAN LAM
Third Defendant by Counterclaim

TINH AU
Fourth Defendant by Counterclaim

(BY COUNTERCLAIM)
 

Catchwords:

Practice and procedure - Application for further discovery

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Application dismissed

Category:    B

Representation:

Original Action

Counsel:

Plaintiff:        Mr G A Lacerenza

First Defendant               :        Mr P G McGowan

Second Defendant               :        Mr P G McGowan

Solicitors:

Plaintiff:        G A Lacerenza & Associates

First Defendant               :        G V Lawyers Pty Ltd

Second Defendant               :        GV Lawyers

Counterclaim

Counsel:

First Plaintiff by Counterclaim     :        Mr P G McGowan

Second Plaintiff by Counterclaim    :        Mr P G McGowan

First Defendant by Counterclaim :    Mr G A Lacerenza

Second Defendant by Counterclaim :        No appearance

Third Defendant by Counterclaim    :        No appearance

Fourth Defendant by Counterclaim  :        No appearance

Solicitors:

First Plaintiff by Counterclaim     :        GV Lawyers

Second Plaintiff by Counterclaim    :        GV Lawyers

First Defendant by Counterclaim :    G A Lacerenza & Associates

Second Defendant by Counterclaim :        No appearance

Third Defendant by Counterclaim    :        No appearance

Fourth Defendant by Counterclaim  :        No appearance

Case(s) referred to in judgment(s):

Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd (2010) WASC 218

Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd (2005) WASC 60

1. MARTINO J:  By a summons dated 16 January 2017 the plaintiff applies for an order for further and better discovery.

The disputes between the parties

1. This action arises out of disputes concerning property development projects.

2. In her statement of claim dated 18 August 2015 the plaintiff pleads that in or about November 2001 the plaintiff and the first defendant or the plaintiff and the first and second defendants commenced to carry on a partnership business of land purchases for the purposes of the development of multiple dwellings, that the partnership projects included three projects and that the first defendant as the managing partner of the partnership failed properly to exercise his management powers.

3. The plaintiff claims that accounts be taken and for payment of monies pursuant to those accounts. 

4. In their further, further amended defence and counterclaim dated 25 November 2016 the first and second defendants deny the partnership pleaded by the plaintiff.  They plead that the dealings between the plaintiff and the first defendant and the second defendant included nine projects, that the parties involved in the projects varied, with some of the projects involving the second and third defendants by counterclaim and one of the projects involving the fourth defendant by counterclaim and that the interests of the parties in each project varied.  The first and second defendants plead that various agreements were entered into by the parties to the projects.

5. The first and second defendants counterclaim a declaration that each of the nine projects which they plead constituted separate joint ventures and that accounts be taken of them.

6. The second, third and fourth defendants by counterclaim have filed notices that they will abide by the decision of the court.

7. By her further amended reply and defence to counterclaim dated 25 January 2017 the plaintiff pleads that the second project pleaded by the first and second defendants was not part of the partnership, that the third, seventh and ninth projects were projects in which she was a co‑borrower of funds and that the fourth, fifth and sixth projects were as pleaded by the first and second defendants.  The plaintiff admits some and denies other matters pleaded by the first and second defendants as to the agreements they plead and pleads other matters concerning those agreements.  The plaintiff denies that the first and second defendants are entitled to the accounts that they seek and pleads that Barringtons Chartered Accountants were appointed by consent of the plaintiff, the first defendant, the second defendant and the second defendant by counterclaim to provide a single expert witness report.  The further amended reply and defence to counterclaim refers to a document attached to it which appears to be a minute of consent orders from an action in the Family Court appointing Barringtons to investigate and report on matters in dispute.

Discovery of documents

1. On 16 March 2016 I made orders in accordance with a consent minute signed by the solicitors for the plaintiff and the first and second defendants which included orders that the parties exchange discovery on oath and that there be inspection of documents.

2. The first defendant provided discovery by affidavit on 9 May 2016 and on 30 November 2016.  The affidavit of discovery of 30 November 2016 did not include confidential Family Court documents which had been included in the affidavit of 9 May 2016 and which the parties agreed should not have been discovered.  On 20 December 2016 the second defendant filed an affidavit deposing that she authorised the affidavit of discovery of the first defendant.  The second defendant's affidavit refers to the first defendant's affidavit dated 13 November 2016.  I understand that this is an error and that the affidavit the second defendant meant to refer to was the first defendant's affidavit of discovery dated 30 November 2016.

3. The first defendant's affidavit of discovery of 30 November 2016 included a report in eleven parts by Barringtons, dated 17 December 2013 and, in respect of each part, documents such as deposit receipts, settlement statements and bank statements.

4. On 30 November 2016 I made orders in accordance with a minute of proposed consent orders signed by the solicitors for the plaintiff and the first and second defendants which included orders that the plaintiff provide to the first and second defendants a further list of documents identifying further and better discovery sought from the first and second defendants and that the first and second defendants provide further discovery or a statement of objections to the plaintiff's list.

5. The plaintiff has filed a request for further and better discovery dated 7 December 2016 in which the plaintiff requests discovery of further banking, planning, building, insurance and other documents in relation to the projects with which this action is concerned.

6. In support of her application for further and better discovery the plaintiff swore an affidavit dated 23 January 2017 in which she deposed to aspects of the history of the dispute between the parties.  The affidavit concluded with paragraph 26 in which the plaintiff deposed that as a result of the matters to which she deposed in the earlier paragraphs of her affidavit it was her belief that all relevant documentation made and prepared concerning the parties family partnership business are in existence and that the first and second defendants had control and/or possession of those documents on behalf of the family business partnership and that those documents related to one or more of the matters in question in the action.

7. On 25 January 2017 the first defendant, on behalf of both defendants, swore a further affidavit.  In that affidavit he deposed that the first defendant and the second defendant are husband and wife.  The plaintiff and the second defendant by counterclaim are divorced.  There were proceedings in the Family Court between them.  The first defendant is the brother of the second defendant by counterclaim.  The first defendant and the second defendant were joined as parties to the Family Court proceedings.

8. In the Family Court proceedings there was an order for an expert report to be prepared by a single appointed expert dealing with the various projects with which this action is concerned.  Barringtons were appointed as the single expert to produce the report, which was done by Charlie Sam Napoli and dated 17 December 2013.

9. As part of the preparation of the report by Barringtons the first defendant provided to Barringtons a large number of documents relating to the dealings between the plaintiff, the first defendant, the second defendant and the second defendant by counterclaim and copies of those documents are annexed to the report by Barringtons.  Those documents have been discovered by listing them by reference to the projects in the first defendant's affidavit of discovery of 30 November 2016.  The first defendant also deposes that Parts 1B, 2A and 2B of his affidavit of discovery incorrectly refer to documents of the plaintiff. Those references to the plaintiff should be read as references to the first and second defendants, not the plaintiff.

The issues raised by the plaintiff's application for further discovery

1. The plaintiff's application for further and better discovery was listed for argument on 16 March 2017.  The parties filed outlines of submissions for that hearing.  At the hearing on 16 March 2017 I ordered that the application be adjourned to the CMC list on 12 April 2017 for the parties to confer as to precisely what documents or groups of documents the plaintiff says have not been discovered.

2. On 11 April 2017 Luke James Durack Barker, a solicitor employed by the solicitors for the first and second defendants, swore an affidavit to which was attached copies of correspondence concerning the plaintiff's request for further and better discovery.  On 10 April 2017 the plaintiff's solicitors wrote to the solicitors for the first and second defendants.  Attached to the plaintiff's solicitors' letter was a list which they said identified the documents that had not been discovered.  In the letter the plaintiff's solicitors said that, in addition, the report by Barringtons made a great deal of references to the inadequacy of disclosure of financial and construction related documents.  On 11 April 2017 the solicitors for the first and second defendants replied to the plaintiff's solicitors' letter of 10 April 2017.  In that letter the first and second defendants' solicitors said that after the hearing on 16 March 2017 counsel for the first and second defendants requested that the plaintiff's solicitors identify documents which were not contained in or part of the report by Barringtons which were relevant and not discovered and that the plaintiff's solicitors' letter of 10 April 2017 failed to do that.  They said that banking records had been redacted because the redacted transactions do not relate to matters in issue in this action.

3. For the hearing on 7 August 2017 the plaintiff's solicitors have filed final submissions on the application, which are dated 1 August 2017.  The submissions states that the first and second defendants have not provided additional discovery or objections to the plaintiff's request.  I do not accept that submission.  It appears to me from the history which I have summarised in these reasons that the first and second defendants have responded to the plaintiff's request for further and better discovery, most recently in the letter from the first and second defendants' solicitors to the plaintiff's solicitors dated 11 April 2017.

4. The principles which I apply on the application for further discovery are those explained by Master Newnes, as his Honour then was, in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd (2005) WASC 60 [3] ‑ [6] and by Murphy JA in Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd (2010) WASC 218 [3] ‑ [8]. This court has, in its inherent jurisdiction, the power to order further and better discovery which is exercised according to the former practice of the Court of Chancery. Order 26 r 6 of the Rules of the Supreme Court 1971 (WA) relaxes the Chancery rules and allows a challenge to discovery based on a contentious affidavit seeking discovery of particular documents, or a particular class of documents. The introduction of O 26 r 6 enlarged the court's inherent jurisdiction, but that inherent jurisdiction remains.

5. The matters in issue are to be determined by reference to the pleadings. Every document relates to matters in question in the action which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may either directly or indirectly enable the other party to advance its own case or to damage the case of the other party. There is not a strict entitlement to an order for discovery, including an order for further discovery. Moreover, amendments to the Rules, including the introduction of O 1 r 4B and O 26 r 7, emphasise the need to have regard to the timely and cost effective disposal of the action in the exercise of the discretion to order discovery.

6. The plaintiff continues to assert that she has identified that the discovery provided by the first and second defendants is inadequate, without making any detailed analysis of why the discovery that has been provided is inadequate.  In paragraph 14 of the plaintiff's outline of submissions of 16 January 2017 the plaintiff submits that there has been no discovery of matters such as financial and accounting records.  I do not accept that submission.  There has been discovery of such items in the first defendant's affidavit of discovery of 30 November 2016.  The plaintiff has failed to establish that there is any basis upon which it is appropriate for the timely and cost effective disposal of this action for me to order that further discovery be provided.  The plaintiff's application is dismissed.